The Tokyo District Court on Thursday handed down the ruling on Fusako Shigenobu, 60, known as the "empress" for her leadership of the organisation, founded in 1971 in alliance with anti-Israeli Palestinian factions.
Prosecutors had demanded a life sentence for Shigenobu in connection with the attack on the embassy in the Dutch capital, in which the French ambassador was taken hostage by militants who demanded the release of an imprisoned comrade.
In issuing the ruling, presiding judge Hironobu Murakami said: "While placing absolute trust in her own cause and assertions, she tried to achieve her illegal goals by putting many unrelated lives and people in danger."
Shigenobu was arrested in late 2000 outside a hotel in Osaka, western Japan, after eluding police across three continents for more than 25 years.
Shigenobu, originally a member of another leftist group, the Red Army Faction, travelled to Lebanon in 1971 and founded the Japanese Red Army, which linked up with Palestinian radicals to become an implacable foe of Israel.
The group turned into one of the world's most feared guerrilla organisations for its deadly and spectacular acts, from plane hijackings to hostage-taking, mostly in the 1970s.
Among its actions was a 1972 attack on Israel's Lod Airport in Tel Aviv in which 26 people, including two Red Army members, were killed in a hail of machine-gun fire and grenade blasts.
After bombing a US military facility in Naples, Italy, in 1988, the group conducted no more major attacks and faded from view in Japan.
The group was born out of the 1960s anti-Vietnam War movement and advocated the destruction of capitalism. Its members fought at home against the presence of US military forces in Japan, then took their struggle overseas in the early 1970s.
Apart from the hijackings and attacks on airports and embassies, some members of the group were suspected of torturing and killing a dozen comrades who threatened to inform on them in Japan.